A new study from Juniper Research forecasts that loot boxes and skins gambling, two emerging gaming and esports growth sectors, will reach a total spend of $50 billion by 2022, up from under $30 billion this year.

Loot boxes are in-game packs which contain a random selection of items; while skins are in-game cosmetics which change the appearance of weapons or characters.

Skins Create Unregulated Gambling Market

The research, Daily Fantasy Sports & In-Game Gambling; Skins and Loot Boxes 2018-2022, found that skins gambling should be of great concern to regulators. Frequently utilised as virtual currency for betting, skins are then cashed-in for real money via online trading platforms.

Research author Lauren Foye explained: “Skins are acquired both through playing video games and from opening purchased loot boxes. These items have value depending on rarity and popularity within game communities. On PCs, skins are traded for real money via Steam’s ‘Marketplace’; the platform has 125 million registered users globally.”

Regulation Needed for Youth Participation

A 2017 study by the Gambling Commission found that 11% of 11-16 year olds in the UK had placed bets with skins; meaning around 500,000 children under the age of 15 could be using skins for gambling. Juniper finds skin gambling risks being pushed underground; without further counter-measures, wagers will surpass $1 billion globally by 2022, a fifth of the global market seen prior to Steam’s interference.

Juniper strongly recommends regulation for skin trading and gambling, in an attempt to both prevent youth participation and remove malicious actors who run sites which steal skins or short-change users.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.